Saturday 15 May 2010 20.04 EDT
First published on Saturday 15 May 2010 20.04 EDT

Will Hutton, the Observer columnist, has been appointed by the government to head a review into public sector pay, it was confirmed last night.

In a move that has echoes of Gordon Brown's attempts to build a government of "all talents" by bringing in the likes of Digby Jones, the former CBI director general, Hutton will be asked to look at the gap between the highest- and lowest- paid public servants. The appointment will be seen as an attempt to appease centre-left critics of the Conservative- Liberal Democrat coalition.

David Cameron has also invited Labour's Frank Field to advise the government as the new poverty tsar. The maverick MP appeared alongside the Cameron at an event in January and has a history of cross-party alliances.

However, Hutton's appointment is more unexpected. The former Observer editor was closely linked to the New Labour project and is seen as a leading liberal commentator. He is also executive vice-chair of the Work Foundation, a high profile think-tank.

The appointment places Hutton at the heart of one of the most challenging policy areas for the new coalition. Before the election, the party promised to set up the fair pay review to ensure no senior manager in the public sector could earn more than 20 times the lowest paid person in their organisation. As well as tackling unfairness, they hoped the move would cut the cost of public sector pay.

Hutton said the review will look at how to limit the pay-gap in the public sector and over what period such a cap could be brought in.

"It will also address the level of remuneration needed to retain, attract and motivate staff of the quality required — especially given what is happening to private sector pay, and the extent to which distortions and market failures in private sector pay create pressure for unfair pay multiples in the public sector," he said. "The review will include staff covered by the senior salaries review body, non- departmental bodies and managers in local government and the NHS."

Hutton, who is author of the best-selling The State We're In, will be supported by Stephen Bevan, managing director of The Work Foundation, who is a public sector pay specialist, and Philippe Schneider, an independent research consultant. All three roles are unpaid. The review will be based in the Treasury and is scheduled to report in December.

Field, meanwhile, has been asked to lead a major review into levels of poverty across Britain – and will also look at how poverty ought to be measured in the future.

The Labour MP caused controversy in 2008 when he teamed up with senior Tories to demand a cap on the number of immigrants settling in Britain. Field, a former welfare minister under Tony Blair, joined Nicholas Soames – a Tory MP who is a figure disliked by many in the Labour party – in the call. Along with the pressure group, Migrationwatch, the MPs aimed to push Brown to end Britain's open door immigration policy which they claimed was deeply unpopular.

As a backbench MP, Field was highly critical of Gordon Brown and regularly called for him to step down. According to the Sunday Telegraph, Field's appointment will be officially confirmed in the next few days. It says the MP is likely to work with Iain Duncan Smith, the former Tory leader who is now secretary of state in the Department for Work and Pensions. Philippa Stroud, co-founder of the Centre for Social Justice – along with Duncan-Smith – has been made a special adviser in DWP after missing out on winning a seat in parliament.

The newspaper also revealed the results of an ICM survey that found 64% of voters thought the Lib-Con coalition was the right way forward after the election results. It was backed by 87% of those who voted Conservative and 77% who backed the Lib Dems.

Meanwhile, a poll for the think-tank Demos found that voters want a new electoral system. The YouGov poll of 2.076 people found that, when asked about the alternative vote system, 49% supported it compared to just 34% who wanted to keep the current system. There was also a high level of support for proportional representation.